A project that costs $12,000 today is expected to produce $35,000 at the end of the first
year. It is expected
that the cash flow at the end of year 2 will be -$25,000. Two IRRs can be calculated:
25% and 66.67%. If the firm's cost of capital is 10%, should the project be undertaken?

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The Answer of A project that costs $12,000 today is expected to produce $35,000 at the end of the first
year. It is expected
that the cash flow at the end of year 2 will be -$25,000. Two IRRs can be calculated:
25% and 66.67%. If the firm's cost of capital is 10%, should the project be undertaken?

A Project That Costs $12,000 Today Is Expected to Produce